UK's decision on Huawei to guide the world towards cooperation
Following an extensive and focused assessment and deliberation, the United Kingdom finally allowed Huawei to be part of building its 5G telecommunications network. Although the "limited role" prevented the Shenzhen giant from supplying core and sensitive parts, the decision is still very significant.
The exclusion of global 5G leader could have deeper repercussions for the UK goal to diversify its supply chain by letting the disruptive entrants such as Huawei to kill the duopoly in the country and achieve the connectivity of the national infrastructure cheaply and quickly.
Going ahead with the world's largest 5G infrastructure provider will boost the British government's commitment to connect 15 million premises to full fiber broadband by 2025 and provide nationwide coverage by 2033. It will also help to realize its ambition of becoming the world leader in 5G. In addition, the move will remove the barriers to the construction of a faster network in the country costing 5 billion pounds.
The digital infrastructure market has very few top global players; just three, to be exact. What's more, the Chinese telecom titan is the one that encompasses the two basic advantages required for the implementation of any major infrastructure deal: it tends to be cheaper and much faster than their rivals.
Huawei is the leader in UK fixed access (Full Fiber FTTP) and 4G mobile access market with share of 44 percent and 35 percent respectively, so it is ideally positioned to accelerate the UK fifth-generation technology drive. British ratification also shut down the economic holes that were threatening to widen over interruption of 5G development plans.
Huawei clearance recouped the estimated permanent losses of up to 11.8 billion US dollars to the UK economy. This is besides the increase of up to 29 percent in investment costs for next-generation infrastructure, and up to 10.4 million of English descents who could have delayed access to innovative technology.
The authorization rendered a grand reprieve to the several UK telecom providers to which had already started to deploy the Huawei technology in more than 70 cities and earlier warned that any suspension in the rollout of 5G could cost them and the Britain economy billions of pounds apart from delaying the deployment by up to five years.
Huawei's global market share is more than the combined share of the next two largest 5G builders. As British Vodafone, German Deutsche Telekom and Spanish Telefonica all are Huawei clients and have warned that the replacement of Huawei kits could cost billions of euros, the British move can embolden the European Union to allow Huawei to operate in the region.
US sanctions on Huawei are towing global telecom providers into a situation where they would essentially sustain huge economic and time losses. Owing to these kinds of diverse convolutions, there has been an increased realization in the European countries that restricting Huawei won't be a doable option for them to mull over.
The UK consent is widely contemplated as a major blow to the US global campaign against Huawei. Britain's action followed after its self-established Huawei Cyber Security Evaluation Centre, working under the National Cyber Security Centre, found no malicious activity between the Chinese government and Huawei.
The defining decision by one of the members of the so-called international intelligence sharing group – The "Five Eyes" including the UK, the US, Australia, Canada and New Zealand – tersely rebuffed Washington's allegations that Huawei was involved in spying activities for Beijing or had any clandestine links with China.
Over the last 15 years, only eight companies from all over the world have managed to move up in the global ranking by 70 or more places. Huawei is one of them. It was the fifth-largest in worldwide research and development (R&D) company according to the latest 2019 EU Industrial R&D Investment Scoreboard.
Soon after adding Huawei and its 68 affiliates to the US entity on May 16 by the US Commerce Department over national security or foreign policy interests, the Trump administration issued a 90-day temporary general license to Huawei on May 22 and later extended it on November 18.
The grant and extension of license, which allowed the American companies to continue doing business with Huawei, was itself a rebuke to US claims and emphasized that the world's largest economy wasn't finding a better substitute to Huawei in the country and it desperately needed to live off Chinese technology.
Despite US's last-ditch caveat to the UK that it "would be madness" to use Huawei technology, British Prime Minister Boris Johnson made an independent decision as a head of a sovereign country and fulfilled his promise to provide people "access to the best possible technology," eliminating the risks of fortune losses and lagging behind in global 5G race.
Johnson's first forceful assertion after Brexit is a rousing guidance for Europe and other countries. While it would restore the confidence of business investors and capital markets globally, the move will steer the international world to pursue a cooperative and collaborative approach to regenerate the tariff- and sanction-hit global economy.